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INTRODUCTION TO E-BUSINESS AND E-COMMERCE
Chapter 1
Abul Khayer, Lecturer
International Business
Slide 1.2
Learning outcomes Define the meaning and scope of e-business
and e-commerce and their different elements
Summarize the main reasons for adoption of e-commerce and e-business and barriers that may restrict adoption
Use resources to define the extent of adoption of the Internet as a communications medium for consumers and businesses
Outline the business challenges of introducing e-business and e-commerce to an organization.
Slide 1.3
Management issues How do we explain the scope and
implications of e-business and e-commerce to staff?
What is the full range of benefits of introducing e-business and what are the risks?
How great will the impact of the Internet be on our business? What are the current and predicted adoption levels?
Slide 1.4
E-business opportunitiesReach:
Over 1 billion users globally Connect to millions of products
Richness Detailed product information on 20 billion + pages
indexed by Google. Blogs, videos, feeds… Personalised messages for users
Affiliation Partnerships are key in the networked economy
Slide 1.5
E-business Risk
Strategic risks: making wrong decisions about e-business investments
practical risks: bad stories which may lead to change the company reputation
Slide 1.6
E-business
E-business is the use of the Internet and IT to execute all of the business processes for the firm. E-business includes e-commerce, all internal processes, and coordination with business partners such as customers and suppliers
Slide 1.7
E-business
E-business refers to the use of digital technology and the internet to execute the major business processes in the enterprise. It includes the activities for the internal management of the firm and for coordination with supplier and other business partners. It also includes e-commerce.
Slide 1.8
E-business
E-business is the conduct of business on the Internet, in supply-chain planning, tracking, fulfillment, invoicing, and payment. It includes buying and selling as well as serving customers and collaborating with business partners. It combines the resources of traditional information systems with the global reach of the Web.
Slide 1.9
E-Commerce
E simply means anything done via the internet and commerce means buying and selling products, services and information.
So, E Commerce refers to the process of buying and selling or exchanging of products, services, or information via computer networks including internet.
Slide 1.10
E-Commerce
E-commerce is associated with buying and selling of information, products and services via computer networks to-day and in the future via any one of the myriad of networks that make up the I-way.
E-commerce concerns the processes for buying and selling goods and services electronically
Slide 1.11
E-Commerce
E-commerce is the online process of developing, marketing, selling, delivering, servicing, and paying for products & services transacted on internetworked, global marketplaces of customers, with the support of a worldwide network of business partners.
Retail e-commerce revenues have grown exponentially since 1995 and have only recently “slowed” to a very rapid 16 percent annual increase, which is projected to remain the same until 2010.
The Growth of E-CommerceThe Growth of E-Commerce
Slide 1.13 Key Concepts in E-Commerce
Digital goods: Digital goods are goods that can be delivered over a digital network.
• E.g., Music tracks, video, software, newspapers, books
Slide 1.14 Key Concepts in E-Commerce
Digital market: In Digital market, consumers and suppliers can ‘see’ the prices being charged for goods, and in that sense digital markets are said to be more ‘transparent’ than traditional market.
Slide 1.15
E-Commerce
E-commerce involves digitally enabled commercial transactions between and among organizations and individuals. Digitally enabled transactions include all
transactions mediated by digital technology
Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services
Slide 1.16
E-Commerce Electronic commerce is the paperless exchange of business information using electronic data interchange (EDI), e-mail, electronic bulletin boards, fax transmissions and electronic fund transfer. It refers to Internet shopping, online stock and bond transactions, the downloading and selling of “soft merchandise” such as software, documents, graphics, music etc (Business town.com).
Slide 1.17
Electronic Commerce from the different perspective
Communication Perspective: Electronic Commerce is the delivery of the information, products/ services, or payments over the telephone lines, computer network, or any other electronic means.
Slide 1.18Electronic Commerce from the different perspective
Business Process Perspective: EC is the application of the technology toward the automation of business transactions and workflow.
Online Perspective: EC provides the capability of buying and selling products and information on the internet and other online services
Slide 1.19Electronic Commerce
from the different perspective
Service Perspective: EC is the tool that addresses the desire of firms, consumers, and mgt to cut service costs while improving the quality of goods and increasing the speed of service delivery
The Scope of E-Commerce
Figure 1.1 The distinction between buy-side and sell-side e-commerce
Slide 1.22Different types of Sell-side E-commerce
Transactional e-commerce sites: These enables purchase of products online. The main business contribution of the site is through sale of these products. It also provides information to the customer about the products
Services-oriented relationship-building web sites: provide information to stimulate purchase and build relationship. Products are not typically available here for purchase.
Slide 1.23
Brand-building sites: Provide an experience to support the brand. Their main focus is to support the brand by developing an online experience of the brand.
Portal or media sites: provide information or news about a range of topics. ‘Portal’ refers to a gateway of information. These information both on the site and through links to other sites.
Figure 1.2 Summary and examples of transaction alternatives between businesses, consumers and governmental organizations
Figure 1.3 Dubit C2C site for a youth audience (www.dubit.co.uk)
Figure 1.4 Three definitions of the relationship between e-commerce and e-business
Figure 1.5 UK rate of adoption of different digital mediaSource: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details
Slide 1.28
Drivers of consumer Internet adoption
Driver Marketing approach
COST TRANSPORTATIONSTAFFTIME SAVINGPAPER LESSFASTER
CUSTOMERSATISFACTION
DemandIncreasing market place shareServicesQuality (R&D)
COMPETITIVENESS customer demand.Improving the range and quality of services offered. Avoid losing market share to business alreadyusing e- commerce
Slide 1.29
Barriers to consumer adoption
No Perceived Benefit
Lack of Trust
Security Problem
Lack of Skill
Cost
Slide 1.30
Drivers of business internet adoption Cost/efficiency drivers◦ Increasing speed with which supplies can be
obtained◦ Increasing speed with which goods can be
dispatched◦ Reduced sales and purchasing costs◦ Reduced operating costs.
Competitiveness drivers◦ Customer demand◦ Improving the range and quality of services
offered◦ Avoid losing market share to businesses already
using e-commerce.
Slide 1.31
Tangible and intangible benefits
Tangible benefits Intangible benefits
Increased sales from new sales leads giving rise to increased revenue from:– new customers, new markets– existing customers (repeat-selling)– existing customers (cross-selling).
Marketing cost reductions from:– reduced time in customer service– online sales– reduced printing and distribution costs of marketing communications.
Supply-chain cost reductions from:– reduced levels of inventory– increased competition from suppliers– shorter cycle time in ordering.
Administrative cost reductions from more efficient routine business processes such as recruitment, invoice payment and holiday authorization.
Corporate image communication Enhancement of brand More rapid, more responsive marketing
communications including PR
Faster product development lifecycle enabling faster response to market needs
Improved customer service Learning for the future Meeting customer expectations to have a
web site Identifying new partners, supporting existing
partners better Better management of marketing information
and customer information Feedback from customers on products
Figure 1.6 Attitudes to business benefits of online technologiesSource: DTI (2002)
Figure 1.7 North West Supplies Ltd site (www.northwestsupplies.co.uk)Source: Opportunity Wales
Figure 1.8 Adoption of Internet and e-business services across EuropeSource: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, © European Communities 2005, http://europa.eu.int/information_society
Figure 1.9 Barriers to development of online technologiesSource: DTI (2002)
Figure 1.10 The McKinsey 7S frameworkSource: Adapted from Waterman et al. (1980)
Slide 1.37
7S Framework
Strategy – new strategic responses are required
Structure – new structures and responsibilities may be required
Systems – new information systems and new processes will be required
Style – less likely to change, but some organizational styles are more responsive to change
Slide 1.38
Staff – new responsibilities
Skills – new skills
Super ordinate goals – higher level aims may be updated depending on the business.
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